Amazon, Samara seek CCI nod to acquire More supermarket chain

Amazon arm will buy 49% in Samara firm Witzig Advisory, which signed a deal to acquire 99.99% of Aditya Birla Retail last month; Samara will hold 51% in Witzig, which will own ABRL if CCI okays deal

Amazon.com NV Investment Holdings LLC, the investment arm of US online retail giant Amazon.com Inc., and private equity firm Samara Capital have sought the Competition Commission of India (CCI)'s approval to acquire supermarket chain More from the Aditya Birla group.

According to documents sourced from business intelligence platform Paper.vc, Amazon.com NV Investment Holdings will acquire 49 per cent stake in Witzig Advisory Services, the wholly-owned subsidiary of Samara Capital, which entered into an agreement to acquire 99.99 per cent of Aditya Birla Retail Limited (ABRL) last month.

Samara Capital will continue to hold the remaining 51 per cent stake in Witzig, which will be the owner of ABRL if the transaction gets a nod from the CCI.

RKN Retail Pvt. Ltd, a majority promoter entity in Aditya Birla Retail, will sell its entire 62.2 per cent stake, while the rest will be sold by another promoter entity Kanishtha Finance and Investment Pvt. Ltd. The deal was formally announced in an exchange filing by RKN Retail on 19 September.

With 523 supermarkets and 20 hypermarkets, More is the fourth largest supermarket chain in India after Reliance Retail, Future Group and D-Mart. As per sources, the deal values More chain at Rs 42 billion. In FY18, Aditya Birla Retail reported a loss of Rs 4.9 billion on a topline of Rs 44 billion.

With this acquisition, Amazon will get access a vast supermarket network as the retail major plans to build its own food retail business in India. The company is in the process of launching new products for grocery and everyday kitchen supplies, an area where the US firm has committed to invest $500 million after India announced that it would allow 100 per cent FDI in food retail.

“Through this investment, Amazon looks to enhance its services portfolio and meaningfully invest in and create opportunities for skill development and job creation," a company spokesperson had told Reuters earlier.

In food and grocery delivery, firms like Flipkart, Amazon and Big Basket are creating specialised infrastructure for handling same-day delivery. Amazon, which launched its grocery delivery business in February 2016, had initially partnered with supermarkets such as BigBazaar, Star Bazaar, Modern Bazaar and Spar and others.

While Amazon has now set up dedicated warehouses in large metros to cater to grocery deliveries, it continues to tap large retail chains to fulfill orders. With More, Amazon could get its own in-house supermarket to service its online grocery demand, just as it is doing in the US with its acquisition of Whole Foods.